UK High Street Sales Suffer "Most Horrific" October On Record

The writing was on the wall two weeks ago when retail employment tumbled along with CBI-reported retail sales, but tonight's BDO High Street Sales Tracker should be the icing on the cake for any looming rate hike as like-for-like sales crashed 5.2% - describe by BDO as "the most horrific" October on record.

It was the worst month since right before Brexit in April 2016.

Consumers resisted spending in October following the rise of the Consumer Price Index (CPI) to 3% in September. Recent confidence barometers have also suggested a creeping decline in economic and spending confidence amongst consumers.

As wage increases continue to be outstripped by higher inflation, and with the (now real) anticipation of higher mortgage payments, then it comes as little surprise that people are tightening their belts prior to the anticipated Christmas expenditure.

Fashion sales plunged 7.9% YoY and were the wost segment, but retailers aren’t alone; restaurant, pub and bar groups “also feeling the pinch” in recent weeks.

Rain Newton-Smith, CBI Chief Economist, blamed the weakness on higher inflation.

“It’s clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”

This collapse fits with what we noted previously, as the British Retail Consortium reported that retail employment dropped at the fastest rate since 2008.

From The Independent, UK retailers cut jobs over the past three months at the fastest rate since comparable records began in 2008, due to technological change and rising employment costs, the British Retail Consortium said on Thursday.

The BRC, which represents major retailers, said its members employed 3.0 per cent fewer staff in the third quarter of this year than during the same time in 2016, and total hours worked fell by 4.2 per cent year-on-year.

Both were the steepest falls since the BRC started collecting records in 2008, when Britain was in the middle of its sharpest recession in decades. This contrasts with the picture in the broader economy, where the unemployment rate is its lowest since 1975 and job creation has been strong, albeit partly at the expense of wages. Still, the BRC report chimed with a European Commission survey last month that showed British retailers’ expectations for employment sank to their lowest since late 2011.

“The pace of job reductions in the retail industry is gathering steam,” BRC chief executive Helen Dickinson said.


“Behind this shrinking of the workforce is both a technological revolution in retail, which is reducing demand for labour, and government policy, which is driving up the cost of employment,” she added.

Retail, which accounts for just under 10 per cent of jobs in Britain, has a lot of low-paid jobs that have been affected by rapid rises in the minimum wage in recent years, as well as a new government training levies and pension requirements.


Manthong Crazy Or Not Fri, 11/10/2017 - 06:24 Permalink

/* Style Definitions */
{mso-style-name:"Table Normal";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-bidi-font-family:"Times New Roman";
  High Street…… Meth, coke or what ??? Maybe opioids….   We are all cool with that. …except we might not pay a zillion pounds for the house or flat.

In reply to by Crazy Or Not

THE DORK OF CORK css1971 Fri, 11/10/2017 - 05:19 Permalink

Exporting  your  wealth  in  exchange  for  the  company  tokens  marks  you  out  as  yet  another  colony  of  the  bank  ,  mercantilism  is  always  net  negative  to  wealth.However  the  Uks   historic  dependence  on  the  (forced)mercantilism  of  others  makes  it  very  vulnerable  to  deglobalization

In reply to by css1971

julian_n Fri, 11/10/2017 - 04:27 Permalink

Also does this include Internet purchases?As more and more councils try to extort ever more money with things like increased car parking charges, more and more shoppers will turn to the Internet and free deliveries to avoid the hassles.

Panic Mode julian_n Fri, 11/10/2017 - 05:01 Permalink

Fuck councils, they are run by retards with an attitude "Don't care. Tax payers will fund this and that". They charge the rent disregard how well the business runs. They don't understand they have an uphill struggle to compete against the super giant, Amazon. They need to change their rental model by charging percentage of profits in order to encourage more shops opened. What's not good for shops, not good for them mentality. Most of the town centers are covered with charity shops, cafe, salons, and nail bars. 

In reply to by julian_n

reload Panic Mode Fri, 11/10/2017 - 06:57 Permalink

Yes: Your average government worker, central or at local council level has little clue about the commercial realities of retail OR etail. They see a business that is growing and has sales and think `tax donkey` they do not stop to think `what are their margins, are they really doing well?`Case in point - last weekend I spoke to a very large county council cheif exec at a social function. A big UK founded and owned specialist etailer was being discussed. By chance I know the new CEO very well, the council chap voluteered that with sales of 450M p.a he expected the government to enjoy bumper tax receipts from their new warehouse and admin building. I said `do you know what their profits are and their profit margin? - he looked blank, then said `probably 50%. I told him they net less than 2% and with sales in 70 countries hardly need to be located in a country that views all business enterprises as easy to loot tax farms.He spends all his time doing diversity reports, equal oportunity audits and other PC `tasks` - foolish of me to think he might have one foot in reality.

In reply to by Panic Mode

Righttoarmbears Fri, 11/10/2017 - 05:04 Permalink

the amount of household disposable income has been declining recently, combined with the rise in imported goods because of weak GBP, plus tightening and fully maxed credit for some, this is hardly a surprise.when families are buying their weekly shopping on credit card how much longer can you stretch the elastic?

bentaxle Fri, 11/10/2017 - 05:05 Permalink

As the BoE is well aware consumers are borrowed to the hilt. Wages have stagnated for a decade, consumers can no more afford their debt burden now than they could back then.Also, the belief held by the elderly that the young are indisciplined spenders that borrow recklessly and therefore need discipline, whether true or not, means their political class will stand on a platform of prosecuting austerity, if that's what gets them elected. And research shows the elder section of the UK population have the clout to swing an election. So, not surprisingly, the Tory government policy of deficit reduction, (austerity,) the BoE raising rates, added to over-indebted consumers, and voila spending down the toilet!(It's got piss all to do with brexit! Which The Guardian would have you believe.)Only question is when is QE coming again? Can't taper a ponzi, can we? 

Calculus99 Fri, 11/10/2017 - 05:20 Permalink

Wait till Jan-Mar then you'll know what a bloodbath looks like. Gap the other day were offering 35% off on everything + free P&P. Folks, we're 7 weeks away from xmas and it's not even black Friday yet...

THE DORK OF CORK Fri, 11/10/2017 - 05:33 Permalink

The  "austerity"  we  have  seen  in  the  Uk  ,  indeed  throughout  the  19th&20th  century  is  the  rationing  required  to  feed  the  war  or  consumer  war  economy. Unfortunately  given  its  population  density  (  a  consequence  of  peasants  fleeing  its  global  plantations,  starting  with  the  Irish)  it  cannot  now  revert  to  localism

CRM114 Fri, 11/10/2017 - 10:39 Permalink

Nobody's got any money.Friends in the UK have jobs from senior director to mechanic. Every one has lower disposable income than 2007, though around a third have been 'promoted'. Stealth inflation is through the roof; it's difficult to measure but seems to be averaging at least 6% in real terms for real people, or around triple the official figure.Add to that the ever-increasing job insecurity, and spending has not only slowed but there is no realistic way it will ever increase again. Oh, and the UK Cabinet now almost exclusively consists of political animals who simply don't have the intellectual capacity, morals, or courage to fix the problems. In fact, they are even dumber slaves of TPTB than the people who vote for them.